Seema Verma hints at the end of ‘upside-only’ ACOs

As the healthcare industry continues the march toward value-based care, CMS has turned a critical eye on one-sided ACO contracts for driving up costs and making little progress toward value.

“These ACOs are actually increasing Medicare spending, and the presence of these ‘upside-only’ tracks may be encouraging consolidation in the marketplace, reducing competition and choice for our beneficiaries,” CMS Administrator Seema Verma said at the AHA’s Annual Membership Meeting May 7.

The majority of ACOs are in upside-only risk contracts, meaning they are not financially accountable if they fail to meet financial and clinical benchmarks. This year, 460 of 561 Medicare Shared Savings Program ACOs — CMS’ most popular alternative payment model — remain in Track 1, which is upside-only risk.